The scrap metal business is a huge industry. Today, with so many people now environmentally conscious, the idea of recycling is paramount in their minds. The trend is to recycle anything and everything that can be reused or repurposed to extend its life. It’s a noble idea that will do wonders for saving the environment.

However, if you’re new to the scrap metal business you’re probably not very sure of your footing. You may realize that you can make large trades and make lots of money in a very short period of time but you’re not exactly sure how to go about it. Before you’re able to make a go of it, you’ll need to learn how to identify your scrap and do adequate research so you know the appropriate scrap metal prices you should be asking for. Your goal is to be competitive with the market and not lose your shirt in the process. Anyone that can master pricing of metals is prepared to enter this lucrative market.

How to Identify Your Scrap:

To the average person, metal is metal. They may be able to see the difference between steel and iron but the reality is that there are hundreds of different ferrous and non-ferrous categories of metal. In the scrap metal business you need to know how to identify and separate these metals accordingly.

A good place to start is with a reference book that breaks down the different metals into categories. These comprehensive guides can serve as valuable resources that help you know not just the different types of metals but how to separate them into marketable groups so they can be priced.

Learn the Different Compositions:

Very rarely will you find a metal that is pure steel, copper, iron, or nickel. Because people use metal for a number of things, they want metals that are strong enough to do the job but not so strong that they can’t be worked with. They also want metals that are less likely to erode or rust over time so they can get the most out of its use while they can.

To get this done, manufacturers have learned that they can create a specific combination for their customers. You may think that a piece of metal in your hand is iron but it may also be mixed with nickel, copper, or steel. Before you can quote scrap metal prices you need to know how to analyze the composition of each metal piece you’re attempting to trade.

To do this, you will need to obtain a few portable hand tools that can help you analyze the composition of each piece of metal that you sell. These tools are surprising accurate and extremely fast.

These tools, like the X-ray fourescence (XRF) analyzer can come in all sizes and have all sorts of additional features on them. If you’re planning to do a small business of trading scrap metal, it may be enough to have a small, hand held one but if you’re inclined to want to to do a bigger business then you’ll likely get a lot of benefit out of something that is larger and more stable. Just make sure you invest in quality tools, which might cost a little more but you’ll get it all back after a certain time.

Consider the Extras:

You also want to consider extra expenses you may have when it comes to your scrap metal business. These costs may not be directly related to the metal itself but you have to incorporate them into your scrap metal prices or you’ll be out of business before you get started. Consider the costs associated with insuring your business, cleaning your scrap metal, collecting, and transporting it when necessary. There are probably other expenses that you need to think of as well when deciding on the price for your scrap metal that are running through your head right now.

Keep Up to Date:

Like any other business, the scrap metal business is constantly changing. You need to know what metals are trendy and what are not. A smart business owner will keep up with the current global trends. Many people don’t realize it but metal is constantly being traded on the stock exchange and in futures trading. Knowing the going rate is essential for staying competitive in any business. This means that you’ll have to keep up with current demands and try to keep your business knowing which demands you’re able to fulfill.

This can be done by regularly reading periodicals and reports that focus their research on the scrap metal industry. There are many publications that continually report on recent news, editorials, and global events that are having an impact on the global metal trade market.

Another way to keep abreast of what’s happening in the world is to regularly meet up with other local scrap dealers. Find out the scrap metal prices of your competitors and what factors of measurement they’re using.

In the scrap metal business there are many things that would influence the cost of selling scrap metal. It’s not the same as the kid down the block collecting soda cans and taking them in for a deposit. When it comes to scrap metal there are many factors that have to be kept in mind. There is nothing more important than knowing your metals and knowing how to value that metal to get a fair price.

There is a reason why every dealer does not sell scrap metal at the same price. There are a lot of things that can influence scrap metal prices, such as broker fees, public demand, the weight of the metal, and the composition.

The fact is that there is a lot to learn about the scrap metal business that people outside the industry need to know. If you truly want to be successful in the scrap metal business then you need to remain smart and knowledgeable through every step.

Once you understand exactly what are involved in determining scrap metal prices you will be much more competitive in your business and be able to accurately evaluate the quality of the metal you’re trading.